The Game Plan – The Difference Between Small Business Success and Failure

It is an American dream to own a business. But sadly, according to the U.S. Department of Commerce, only 1 in 5 businesses is still in business 5 years after it opens.

A business needs a great business plan, but it doesn’t give management enough information to have a successful, profitable business. You dramatically increase your chance of success with a game plan. According to a PriceWaterhouseCoopers survey, over half of the fastest growing firms not only have business plans, but also have separate game plans to keep them focused on what must be done day to day.

A business plan gets you in the game. A game plan keeps you in the game. To use the sports analogy, it’s easy to see how you are going to win the game in from the locker room. Most businesses don’t have a working plan that takes into account what actually happens on the field once play starts.

A business plan is a sales brochure and a game plan is an instruction manual. You send a business plan to potential investors and others to excite them about the business. A business plan is about strategy. You create a business plan at a management meeting. A game plan is about tactics and is created by and for the people on the front lines. A game plan talks openly about the good, the bad, and the ugly in the business and is used by people in the business to make decisions every day. It talks about what to do in a crisis.

Here’s an example of what I mean:

The CEO takes a look at his balance sheet and decides that his company has too much of its cash tied up in inventory, so he gets his managers together and creates a new corporate objective for the year – to reduce inventory by 25%. If they do that they will all be entitled to a bonus. The managers aren’t stupid – they know the only way to reduce inventory is to sell what they can and not replace it. So they put on a special promotion for their hottest selling items, they reduce the inventory of those to almost nothing, and they get their bonus. But what has really happened here. The CEO’s company is now left with the inventory of the items that weren’t selling, and they don’t have adequate inventory of their best selling items. The CEO didn’t really lead, the employees cared more about their bonuses than doing what was right for the company, and there wasn’t a plan of action that was tied into a meaningful company objective.

A game plan focuses on these things: creating big goals that matter, giving individual employees responsibility to carry out their portion of those goals, creating a budget and a reward system that supports the goals, and tools to allow employees to measure their own progress.

Steps in the Game Plan Process

The game plan requires a series of steps, beginning with the CEO getting in touch with his or her desires for the business. Then, the management team must delve into what is real for the business today – understanding the business model (how the company makes money), having a handle on what is happening in the market, and finally, knowing what is happening in the company culture. With all this background work done, the actual creation of the game plan begins. At best, it is a facilitated process of discussions matching what is real today with what is possible tomorrow, in the long run and in the short run.

A game plan only looks out a year at most, but within the context of a much longer period of time. The company might decide where they want to be in five years – the game plan is just the next series of steps toward that longer-term goal. There is no point in setting objectives for which there aren’t adequate resources, so objectives and budget are discussed in tandem. Another challenge of the game planning process is to define success for each objective and decide how it will be measured.

This is a time for healthy argument as sales wants more resources to increase revenue, product development wants more of the objectives to be toward R&D for the company’s future, and the operations manager wants more staff to improve quality. This is also the time for managers to consider the implications for all the decisions. And it is the time for the CEO to create a connection between the objectives and each of the managers so that there is personal commitment to the success of the company. If managers are not committed, they will never be able to expect commitment from other employees.

Turning Objectives Into Actions

When the company objectives and budget are ironed out, about half the work is done. A second series of steps takes the objectives set at a corporate level, and creates specific action items for each employee that support the department and then company objectives. Just as the CEO and the managers hashed out the process of give and take between what is today and where they would like to be tomorrow, each manager must go through the same process with the departments’ employees. Each employee must have a series of actions, but most importantly, each employee should know where they stand at any time they wish to check.

For instance, if the objectives for a customer service employee are to keep call length to an average of 2 minutes, have sales of an average of $50 per customer who calls, and to return all calls within 24 hours, then you want that employee to be able to find the measurements for those objectives as often as he or she wishes. The goal is for the employee to have access to just as much information about his or her performance as the manager. An employee who can assess his or her own progress real-time will correct performance deficiencies without a manager’s insistence.

The Plan Isn’t a Secret

The final piece is constant communication about the plan and the company’s progress to the employees. The game plan is not only communicated initially, it must be kept alive throughout the year with meetings focused on measuring progress toward the goals. Successes should be celebrated frequently.

In my own company, we used something we called a Game Plan Circle to illustrate our plan each year. It was a six-foot circle with our vision in the middle that radiated out to cover company objectives, department and individual objectives. It served as a visual we could refer to in meetings to keep us on track.

The Bottom Line

Don’t let your business become another failure statistic. A business plan is a great first step in starting or fundamentally changing a business. The next step is a game plan – a translation of that business plan to each employee’s actions every day.

5 Steps for Evaluating the Performance and Status of Your Internet Marketing Business

Sooner or later in your internet marketing business, an evaluation becomes necessary. Some marketers generally perform one regularly while others feel an evaluation only becomes important as a means for correcting unwanted results. Some internet marketers, for example, only evaluate their business when they don’t hit the sales target or when a promotional campaign goes horribly wrong. Don’t make this mistake. Evaluating the performance and status of your internet marketing business should be a component of your business plan and not just a supplement or corrective measure. Here are steps to do it:

What was the purpose of your site again?

To properly evaluate your site, rummage through your drawer right now or open that old folder in your documents file and take a look at what you wrote down in your business plan as the purpose of your internet marketing business. What did you want to achieve with it and how? What were the steps you outlined?

If the purpose of your internet marketing business was to build an affiliate program, for example, what were the products you planned to sell and how? To effectively evaluate the performance and status of your internet marketing business, try to compare where you are with your objectives. You can then try to check which objectives were met and which weren’t. A 20-40% completion rate needs plenty of work while an 80% completion rate is near-outstanding.

Know the numbers that matter.

A simple evaluation of the performance and status of your internet marketing business will boil down to how your numbers do. Let’s say for example you’ve had your internet marketing site running for some time. The number of visitors that have dropped by to check you out has gone from a mere 15 to 15,000 a month. That figure may not be so bad if you’ve just been running your business for a few months. But if your site has been active for two to three years, consider this a bit on the average side.

There are also other factors that affect how you’ll evaluate this number. Fifteen thousand hits, for example, may seem like a lot per month but again, remember the purpose of your business. If your internet marketing business is about selling, for example, how many of those hits have actually converted? If only 15 out of the 15,000 visitors you receive actually buy from you, that is a measly percentage. If you could increase this number to 150 or 1,500 a month, then that’s somehow saying something. Even a 1% conversion rate is considered healthy by many internet marketers.

Just remember: all numbers pertaining to sales and performance should go up, not down or go flatline.

How’s your list?

A healthy list is an indication of a healthy internet marketing business. Whether or not offering a newsletter subscription is the main purpose of your website, for example, make sure you make the most out of the people who express an interest in it. Your goal here is to convince people to sign up, not just to increase your conversion rate but also to collect as many contact information as you can. The list, as many experienced internet marketers say, is everything. Therein lies your money – IF you know what to do with it.

If your list hasn’t grown in a while, perhaps it’s time to look at your method of getting people to subscribe or find a way to offer a fresh new take on a common subject. Remember that people tend to gravitate towards new information and the more recent and updated your content is, the more likely they will be interested.

Are there new opportunities?

Internet marketing involves a lot of networking, which in turn should create fresh opportunities for your business. Always keep track of the source of inquiries you receive and then compare results with the tactics and techniques you use to provide a tangible response or feedback. Find out if there has been an increase in the number of clients or customers you have. If you’re stalling somewhere in the middle, you might be stuck with the same old market. Consider boosting your networking and promotions to gain more traffic and expand your market segment.

Where do you go from here?

An evaluation is much more than just a critique of your master plan. It is actually an excuse to examine what you have been doing so far versus what you should be doing in order to get to where you should be going. Sounds complicated? It’s actually a simple matter.

An evaluation is your means of personal measurement to know how well your internet marketing business has been performing so far. Now that you have an evaluation of your business, it’s time to set more goals. Consider if you are exactly where you want to be right now and whether you are effectively targeting your audience. Find out if there have been changes in the market that affects your business. After your evaluation, it’s time to review your business plan and draw up a fresh one in its place and then use that as a reference in the future.

Are You Ready to Sell Your Business

Make Sure You Understand Your Motivation for Selling

Are you thinking about selling your business?

This simple one-question quiz will help you to better understand your motivations behind this thought. A better understanding of your underlying motivations will help you make the right decision.

Select the answer closest to your actual reason for thinking about selling your business.

A. “I’m selling my business because of the money I will make on the sale”.
B. “I’m just tired and it’s not fun anymore.”
C. “I have too many irons in the fire and can’t keep up”.
D. “I’m ready to retire from owning my business”.

A. “I’m selling my business because of the money I will make on the sale”.

This is rarely a good answer if it is the primary answer. Most small businesses sell for 1 to 3 times yearly cash flow after adding back all owner salary, benefits, fringes, interest and amortization/ depreciation.

Larger mid-sized businesses generally sell for to 3 to 7 times cash flow after deducting for the cost of executive management. While this sum can be significant, it is usually only a few times what you will make this year.

Continuing on with the business will usually make you more money in the long run. On the other hand if you have an offer in hand from a public company at 20 times earnings, take it.

B. “I’m just tired and it’s not fun anymore.”

This question requires careful digging into the reasons for the thought. If you are really ready to get out of the business, then it is a good reason. If the real reason is that you are just tired under the current conditions and as soon as things improve you will get excited again, think long and hard.

Often during the sales process your broker, intermediary, or other advisor will provide coaching to improve obvious defects in the business to make it more salable. Sometimes measurable improvements occur for the business. Suddenly the owner doesn’t really want to sell now that things are moving again.

This is a bad situation for everyone. If what you need is coaching to get out of a rut, hire a coach; don’t sell your business. But, if you are really mentally done, sell the business before you completely run it into the ground.

C. “I have too many irons in the fire and can’t keep up”.

This is a valid reason to sell a business. It is a somewhat common occurrence for multi-location operators who either buy one too many sites or just end up with one or two sites that are too far away to manage.

Often the constant attention you must diverte to an under-performing site will lower earnings of the whole chain. Just remember when pricing the underperforming site for sale that if your not selling much in terms of profits or revenues your not going to get much in terms of price. An old adage that applies here is that the first loss is the cheapest loss. In this instance be prepared to take your loss and move on.

Another variation is the entrepreneur who has a new venture that is overtaking the older established business. Time constraints, management abilities, and variations in potential down stream financial returns may make it desirable to sell the older business. This can free up resources allowing better overall financial returns.

D. “I’m ready to retire from owning my business”.

This is the king of reasons to sell. Just make sure its true. Selling a business often means walking away from it completely. Retiring sellers often want to think that they will be invited guests indefinitely.

Usually once the nuances of the business are understood the new owner will want to take the reins and run the business his way. At settlement you will sign an enforceable non-compete that legally and ethically obligates you to leave your old client base behind.

Another frequent issue is that the retiring owner has run the business “just to meet my needs” the last several years. In those instances the lower performance is what the business sale price is going to be based on. If you as a retiring owner want the full price based on what the business could really do – generate those results yourself and sell the business when the numbers are strong.

In general buyers are the least suspicious about dealing with retiring sellers. If the retiring owner has run the business well up to the end they can often get a small premium on their price.

The Bottom Line

There are thousands of variants to these four reasons to sell your business. Each variation comes down to the same underlying thought process-are you selling because of short term issues you will overcome or are you selling because it is time for you to get out? No one can answer this question for you but your future success and happiness may depend upon getting you it right.

If business is slow in your industry but you are hanging on, and you like the business as much as another career, then don’t sell. Get the marketing, accounting, coaching or other help to get out of your rut and make it to the good times.

If you are completely burnt out, it really is time to retire, or you have much better things on the horizon then sell the business while it is still performing well in order to maximize your sales price.

Building A Business Relationship

If you have an online business, you conduct your business
through the modern technology of computers. Most of your
business is most likely transacted from your website, email,
or phone.

Since the majority of your business transactions are online,
you’re not out meeting people one-on-one developing business
relationships. As with any online business, you need to
focus on building these relationships via the Internet.

Although this may be somewhat more difficult compared to
meeting a customer in person, you can still accomplish this
by keeping communications open and establishing trust with
your customers, as it is a vital step to your business
success.

Some people will start an online business and only focus on
what services or products they can sell. They are not
concerned about establishing a business relationship or even
a simple “thank you” when they do make a sale.

For those who use this methodology will eventually see a
significant drop in their business over time. Ask yourself,
if you dealt with a company that gave poor customer service,
how quick would you go back to them for future business?

Think of relationship building as the foundation to your
business. It establishes you as a professional, trust worthy
and a reliable source.

With an Internet business, this is your only way to
establish yourself as a reputable company, leaving a
positive impression to all who do business with you.

Relationship Building:

Even if you have great products or services that you offer,
most customers or business associates will rate there
experience by how they were treated while doing business
with you, so it’s important to establish relationships with
your customers at all times.

One form of relationship building that you don’t want to
overlook is being there after you have made a sale (or any
other business transaction). Following up with your
customers after the sale is the most important step to the
sales process, as this instills trust and support.

The logic is pure and simple, provide great customer service
to the people you do business with, and you will get
customers coming back to you.

It’s also important to understand and listen to your viewers
needs by asking for feedback or suggestions you can
implement. This will give you the added insight to better
enhance your services.

You can do this by having a contacts page on your website
with a comments or feedback form. If you publish a
newsletter, you can also accomplish this by asking for
feedback from your subscribers.

This is your way of letting your viewers know you care about
what they have to say and how important they are to you.
When you show interest in your customers you will build
credibility and loyalty.

When you receive a request (whether it is a question,
concern or simply someone looking for more information) by
all means answer them promptly. If all possible, answer
their request within 24 hours.

This shows attentiveness to their concerns and that you are
a reliable source.

If you sell products on your website, sell quality products
that have merit, plus offer a guarantee and stand behind it.
One of the quickest ways to destroy a business relationship
is selling poor quality products and not standing behind
what you offer.

If you are promoting third party affiliate programs from
your website, take the time to research the companies you
recommend. Only represent companies that are of legitimate
nature and have a solid Internet presence. Remember the
companies you recommend will have an impact on your business
reputation.

You can summarize the importance of developing business
relationships in one-sentence…”Building relationships builds
retention, retention builds sales, sales grows your
business”.

Copyright 2003-2005

Five Ways to Not Lose Money in Your Network Marketing Business

So you have decided to join the ranks of the millions in North America alone to venture out into the home business arena. So you think you got what it takes to make some money in a network marketing business (MLM) and figure how hard can it be, right?

Most if not all who start up a network marketing business do so in their spare time. So, how much spare time do you really have? From the full time job, extracurricular activities, and the family responsibilities how much time can you dedicate to this business?

If you’re seeing dollar signs before you even make any money it’s time for a wake up call. This is a business, not a charity. Sure the business model is simple but if you really want explosive growth in the industry you really need good network marketing business training.

So stay focus and get to Action.

Here are the 5 ways to NOT lose money in your Network Marketing Business.

1. Keep a time sheet

I can already tell what you’re thinking. You probably wanted to leave your current job and not worry about keeping time. You hate logging in your time at work so why does it on your home business? What is the point of a home business if I can’t work on it whenever?

Reason: You need to stay focused and understand that progress is only taken with action. If you’re not putting in the time how can you correctly measure if your business is actually growing without tracking time spent on it?

2. Be Different

How many companies out there compete with Wal-Mart? Sure, there might be some. The ones that do survive do NOT do it by following Wal-Mart’s model. No mom and pop shop can compete. So what to do? Differentiate yourself. What is your USP: Unique Selling Point?

3. Task Lists

Honey Do lists are husband’s favorite past time but to really be productive in your network marketing business you need to stay on point and have milestones every day. Get used to knocking out hard tasks and when you see production you will continue to be hungry.

4. Set Goals

Before you even start you need to have a defined goal. What do you want to achieve. Have a long term, mid term and short term goals. The more goals the better you will be. Have obtainable goals so you have strive to work harder and faster yet achieve what you set out to do.

5. TV is Evil

Think I’m kidding? Start to cut down on the shows you watch. Stop watching dumb movies. Start to educate yourself on your industry and learn to love it. Watching TV will NOT help you achieve your goals.

Get good training and jump start your network marketing business. Don’t go head first into your network marketing business without proper internet marketing training. Learn from other’s mistakes and excel in your industry quickly.

How To Start A Successful Network Marketing Business – Tips For Network Marketing Beginners

Network Marketing is a great business for any motivated person. Due to this business model any ambitious individual now has the opportunity for increased wealth and personal growth. Network Marketing is the only business model that provides a residual income that continue to increased over time to you and your heirs with a steady, dependable cash flow, even if you are unable to work. It is better than having money in the bank and living off the interest. Thousands around the world have had immense success with a five digit network marketing income figure monthly with this business model.

There are basically two ways to start an MLM Business. But before we go into that lets take a look at a few questions Network Marketing beginners must ask them selves and find out.

1- What are the products offered by the company?
2- Is the product consumable and has little or no competition? Is it used on a daily basis?
3- What are my possibilities of earning with the MLM Company (Compensation or Pay Plan)?
4- How much am I willing to spend every month on my MLM Business?
5- Am I going to accept support and guidance from my sponsor to help me grow my business?
6- What is the starting cost and sign up product packages of the MLM Company?

These questions are intended to help you make a decision on the company you want to join and can be investigated from the websites of most MLM Companies or company brochures. If your answers to the above questions are very positive, then you can now confidently start your Network Marketing business using one of the approaches as explained below.

The first way to start is by using the Traditional Network Marketing business model. In all old school MLM Companies, the leaders are often good speakers, or they are recruiters with a large social circle. The usual way of prospecting is by a three way system. To elaborate further this is referred by a few names, one such referral is the ABC or Advisor, Bridge and customer system.

To be an Advisor you will need to be able to have good oratorical skills. To be the Bridge you will be a traffic middle man, introducing your large pool of contacts to the Advisor. The customer is the prospect. The Advisor and Bridge work together to bring new reps into the system. Should persuading people verbally and inviting contacts to events come naturally and you feel good the benefits of your company and products can bring to your prospects then this is one route you can take.

The second way to start a network marketing business is utilizes the power of the internet.

The main difference lies in the duplication system. Instead of following up with invites and calling, leads are qualified using sales ads and email marketing. Prospects fill up a form expressing their interest and upon receipt of a link in their email, will click that link to confirm the email is valid. Messages will be sent to the prospect educating them about the automated internet MLM system and how to market it online. New enrollees then join the business by clicking on links that lead them to payment processing pages where they pay for their start up cost and signup packages by credit card. Upon joining, they will proceed to market the same system that brought them in.

The benefits to such a system removes the element of cold calling and speaking to strangers, untargeted prospects. Rather than teach someone who has not put down any commitment to work a business; it is more fruitful to spend one’s energy and time working with a prospect qualified by the automated system. Some people who do not find success in the first business model have found it in the second.

My Recommendation to Network Marketing beginners is to use the second model as it is easy, fast and save time. Why?

Wealth = Physical Resources x Technology

That is, we can increase our wealth by changing our technology, regardless of our physical resources. So if your time is limited, use technology to increase your wealth. If you are not smart as your neighbor, use technology to increase your wealth. If you are not tall, athletic, handsome, educated etc., simply use the technology of the day to improve your wealth.

Technology does not refer to computers! It is not fancy machinery! It is something that is available to every one. Technology is simply knowledge. If you have read this article to this point, you already have the knowledge to start your own Network Marketing Business to make money and become totally financially free.

In this case, the technology is network Marketing. All you need to succeed in your MLM business is Commitment, Energy and Enthusiasm.

Top 10 Business Plan Myths of Solo Entrepreneurs

A recent study of 29,000 business startups noted that 26,000 of them failed. Of those failures, 67% had no written business plan. Think that’s a coincidence?

Here’s the top 10 myths Solo Entrepreneurs often have about business plans-usually, the reasons why they don’t have one. De-bunk the myths, and see how having a business plan for your solo business, can actually be easy and fun–and can jumpstart your success!

1. Myth: I don’t need a business plan–it’s just me!

Starting a business without a plan is like taking a trip in a foreign country without a map. You might have a lot of fun along the way, and meet a lot of friends, but you are likely to end up at a very different place than you originally set out for-and you might have to phone home for funds for your return ticket.

Solo Entrepreneur Reality: Successful Solo Entrepreneurs know that the exercise of creating a plan for their business really helps them think through all the critical aspects of running a business, make better business decisions, and get to profitability sooner.

2. Myth: I have to buy business plan software before I can start.

Business plan software comes in many shapes and sizes, and prices. Many are more geared at small and growing businesses with employees.

Solo Entrepreneur Reality: Software can be helpful-but it’s not required. Software is more likely to help if you have a more traditional type business, like a restaurant or a typical consulting business.

3. Myth: I need to hire a consultant to write my business plan.

Consultants are expensive and don’t really know as much about your business as you do!

Solo Entrepreneur Reality: Your business IS you-and you need to be intimately involved with the creation of your business plan. A better strategy, if you think you need professional help, is to hire a coach or mentor-someone who can guide you in what you need to do, not do it for you.

4. Myth: The business plan templates I’ve seen have all these complex-sounding sections to them-I guess I need all those?

The only time you need to follow a specific outline is if you are looking for funding.

Solo Entrepreneur Reality: Your business plan needs to answer ten basic questions-that’s it! Don’t make things more complicated than necessary.

5. Myth: My business plan needs to be perfect before I can start my business.

If you wait for everything to be perfectly detailed, you may never start.

Solo Entrepreneur Reality: If you have at least a first draft that answers those ten basic questions, you are ready to launch your business! Make your business plan a living, evolving document. In the startup stages, review and update your plan every 2-3 months. As you grow and stabilize, you can slow down the review cycle to every 6-12 months. All business plans should be reviewed and updated at least once a year.

6. Myth: I have to do everything I say I’m going to do in my business plan, or I’m a failure.

Many Solo Entrepreneurs never start because of this myth-which leaves them feeling that the success of their future business suddenly rides on each stroke of the pen or click of the keyboard!

Solo Entrepreneur Reality: Think of your business plan as a roadmap for a trip. Expect to take some detours for road construction. Be flexible enough to take some exciting, unplanned side trips. And don’t be surprised if instead of visiting Mount Rushmore, you decide to go to Yellowstone, if that turns out to meet your vacation goals better!

7. Myth: A good business plan has a nice cover, is at least 40 pages long, must be typed and double-spaced…

Business plans intended for investors, such as a bank or venture capitalist, must meet certain requirements that such investors expect.

Solo Entrepreneur Reality: As a Solo Entrepreneur, your business plan need only satisfy YOU. It might be scribbled on a napkin, on stickie notes on your wall, or consist of a collage of pictures and captions. It might be all in one document or scattered among several mediums. As long as you know it in your head and heart without having to look at it, and and it is easily accessible to you when you have doubts, that’s all that is necessary.

8. Myth: I don’t need a loan-so I don’t need a business plan.

YOU are the investor in your business-and would you invest in the stock of some company without seeing a prospectus?

Solo Entrepreneur Reality: Seeing your plan in black and white (or color, if you prefer!), can give a whole new view on the financial viability of your business. If “doing the numbers” seems overwhelming, remember you don’t need fancy spreadsheets. Just lay out a budget that shows where all the money is coming from (and going), and have an accountant review it for additional perspective.

9. Myth: My business plan is in my head-that’s good enough.

I don’t know about you, but I sometimes can’t remember what I planned yesterday to do tomorrow, if I don’t write it down!

Solo Entrepreneur Reality: There is a real power in writing down your plans. Some schools of thought advocate that the act of writing a plan down triggers our subconscious to start working on how to manifest that plan. And, of course, it’s a lot easier to remember when you have it in front of you. And a lot easier to share and get feedback from your non-mind reading supporters.

10. Myth: Friends and family are the best sources of feedback and advice on my business plan.

If your brother is an accountant and your best friend is a market research expert, then this might be true.

Solo Entrepreneur Reality: As well meaning as our friends and family can often be, they just aren’t the best way to get honest, objective guidance. Instead, seek out folks that have specific knowledge that will help you, are willing to be candid with you, and that have a genuine interest in helping you succeed. A business coach is one resource to consider!

Should You Write Your Own Business Plan?

If you are just starting a company and looking for funding, or looking for additional funding for growth, you will need to develop a traditional business plan. Creating a business plan is a business hurdle that entrepreneurs seem to dread. Do you do it yourself? Do you hire someone to do it? How do you get it done quickly, but without spending too much money on it? Will what you do yourself be adequate to get funding?

In this article I will discuss the pros and cons of do-it-yourself business planning versus having a business planning consultant do it for you or with you.

The Do It Yourself Business Plan

Particularly if you are seeking capital of less than $200,000, consider creating the plan yourself after taking a class or reading some books or getting some coaching for someone who has written successful business plans.

Consider taking a three-hour business planning class through SCORE or the local Small Business Development Center. Even if you decide afterwards not to write your own plan, you will have a much better idea of what you want out of the process and what to expect.

There are some good reasons for an entrepreneur to do the business plan:

  • First of all, because you can. If you’ve read sample business plans and find their accounting jargon intimidating, you are not alone. But as long as you can clearly get your message across and have other people such as you accountant look at the plan before it goes to lenders or others, you can do this work yourself.
  • It is in learning the business planning process that you develop analytical thinking skills necessary to run your business with an intimate understanding of your own business model. Going through the planning process is an invaluable business experience.
  • You need to know the plan inside and out and really understand the variables involved. You are the one who will be asked the tough questions by potential investors or lenders, such as “What will you do if only half your expected revenue comes in?” or “What will you do if you find out that direct mail is not working for you as your primary marketing tool?”

Outsourcing the Business Plan Process

Entrepreneurs are fire fighters. One of the most important jobs of an entrepreneur is to manage time, and do those things that you are best skilled to do. Many entrepreneurs decide to hire someone else to do their business plans, often because they have an urgent need for the funding and can’t afford the learning curve to be able to develop a high-quality plan that will meet the needs of lenders or investors.

In addition, if your funding requirements are more than $500,000 my recommendation is to get some professional help with this project, even if you do some of it yourself.

Some reasons to consider hiring a consultant:

  • It will get done! Business planning is done much faster with someone who knows the process. Every entrepreneur has good intentions about getting plans completed, but months later they still haven’t done all the work. Planning should be high priority work, but it is hard to get to when customer calls and employee problems require immediate attention. The sooner the plan is completed, the sooner funding can be attained. And the price of hiring the consultant will be small in comparison with the increases in growth and profitability of the business.
  • It will get done in a way financial professionals will respect. Business planning is done better by someone who knows how finance people look at plans and what they will and won’t question. Once you’ve been through the business plan process many times, you know what it takes to get funding – what to emphasize and what to play down.
  • The consultant’s objectivity will allow for non-emotionally-based projections and expectations for the business. A consultant will be much more objective in the process and question your assumptions, making it less likely that the business will have problems after the funding comes in.

No matter what, don’t let a business planning consultant talk you into putting any information into your plan that you aren’t comfortable with. If it doesn’t look right to you, it probably isn’t. It is your business, and you will be stuck with the plan long after you’ve paid the consultant’s bill. Make sure it is the plan that you want, one that matches your goals and objectives, and captures the way you look at business and the spirit of your company.

If you do decide to hire a business planning consultant, here are some of the important questions to ask to make sure you get the greatest value from your investment:

  1. How many business plans have you written for my type of business? How many of them were funded?
  2. How much time will you need of mine during the planning process?
  3. When will the plan be completed, and how many drafts should I expect to see and have the opportunity to comment on?
  4. Will you be writing the plan yourself or do you have associates who do the work with you?
  5. Will there be an opportunity for you to present the plan or for me to present the plan to my other advisors before the final draft is done?
  6. How do you work in collaboration with my partners and advisors so their input is taken into consideration during the writing of the plan?
  7. Do you do the market research and the financial spreadsheets, or are those things done separately (and charged for separately)?
  8. Does your price include revisions or customization for certain types of funding (to include different information needed by investors versus lenders)?
  9. Does your price include coaching to prepare me to talk with lenders or make financing presentations?
  10. Will I have an electronic version as well as a hard copy version of the final plan (so I can make changes later if I need to)?

The Optimum Solution: A Blended Approach

At best, the planning process should not be at either end of the spectrum, but squarely in the middle. In my experience, plans that win funding come from a true collaboration between a skilled consultant/facilitator and the entrepreneur’s team of employees and advisors.

A business planning consultant can act as a coach, first assessing the job to be done, and then recommending who is best to do it. The business plan should be a compilation of work between the vision and goals of the entrepreneur, the technical understanding and expertise of his or her accountant and other professionals, a consensus of employees or others, and the research and writing abilities of the business planning consultant. The consultant should meet with all parties involved, talk about what is needed for the plan, and use all the resources available to get the work done as quickly and cost effectively as possible. It is the consultant’s responsibility in the process to take all the pieces and make the final plan into a readable, accessible document that will stand up to investor/lender scrutiny.

My final caveats:

  • Don’t pay more than a few thousand dollars for a plan unless you are looking for capital of well over $1 million. I have heard more than a few horror stories by people who have hired university professors assuming they are the experts (they aren’t) and paying tens of thousand of dollars for a poorly written or incomplete plan. Ask your banker for business planning consultant recommendations, or better yet, talk with someone who had a good experience having a business plan written for them. It is reasonable for a consultant to expect you to pay half of the fee up front and the other half at the completion of the plan. And you can’t hold the consultant responsible if you don’t get funding based on the plan – too much is based on your own credit and management skills.
  • Don’t expect to get a finished plan that is a roadmap of everything you need to do to have a successful business. That isn’t the purpose of the business planning process. A traditional business plan is intended only to document your strategies for the business very briefly – but well enough to get funding. If you are hoping for something that will tell you how to market or how many people you need to hire, you will have to start with a deep strategic planning process, and probably buy lots of consulting time to get you going.
  • Don’t expect a great a business plan from a poor business model. If your costs are too high to make your business profitable, the business planning process will help you discover that. Then it will be up to you to make the hard decisions about changing your costs structure to make the business work. The business planning consultant is a skilled professional, not a miracle worker. A good business plan can help you highlight your strengths and minimize your weaknesses, but it cannot make an unworkable business model into a thriving business.

And one final thought: Don’t go on to start a business or make changes in your current business if everything in the business planning process tells you it won’t work. Things don’t get better out in the real world if they don’t work on paper. Deal with the weaknesses – get more training, consider product redevelopment, or have a home-based business to reduce costs until you can sustain the rent for an office. Businesses fail finally because they’ve run out of money. If your plan tells you that you can’t make enough money to make the business work for the long run, pay attention to that reality.

The Truth About An Internet Marketing Business

The internet has opened up the world and made it smaller! This is especially true for
business. The net simple gives you an opportunity to reach people you simply can’t reach
otherwise. It is true that the internet has made many millionaires at an alarming rate. But
these individual people have worked hard to achieve this. Any business works hard and
effectively to achieve this.

If you have been in the internet marketing business for some time now you will agree that
building an online business is tough! You may have in the past been pitched by a guru telling
you to buy their product as it will make you a wealthy online entrepreneur. Does it ever do
what it says on the tin? Most of the time not… But there are some good products out there
too. I don’t want to knock all of them down. Some internet marketing products have produced
good results for people.

But getting back to the point, an internet marketing business can be a profitable one provided
you have the required skills and are willing to work hard at your business. I myself work hard
to develop my business online. It is important that you do so or other wise your business will
fail miserably! Those who make massive amounts of money online are working hard but also are
working smart.

What I mean by working smart is this… Smart marketers will outsource some of the time consuming
duties of an internet business. Things like, outsourcing on building a website, outsourcing
customer queries, outsourcing SEO duties etc.. These and other duties hold up a marketers
time. So in order to free up time and do what your meant to be doing, which is marketing your
products and services, developing your business, doing the necessary research and thinking for
your business. This time allows you to communicate better with your customers and gives you
the opportunity to learn more about the needs and wants of your customers in your niche.

You see the truth about an internet marketing business is simple. The harder you work at it… in the smart way… the better you are setting yourself up for success online. There are many successful online
businesses and the reason why they are successful is because they are up to speed with all the
latest methods of reaching their customers. They have developed a good relationship with their
customers and turnover good profits each year because of this. The best way to build a business online as a beginner is through affiliate marketing. You can start off your business at a very low cost. There are people on line that are making a nice income online from affiliate marketing. Some make enough money to pay the mortgage bill. Others make enough money to buy a new holiday home every year!

But in order to get to that level, you need to become very good at what you are doing. If you feel like you are capable of using the internet to build a successful business, then I
recommend that along with your drive and enthusiasm, you need to learn from a reputable coaching system. Some one who has built up many successful businesses in the past. Please click on the link below to find out more about how you can learn from the best affiliate marketer in the business.

Part 2 of 5 On The Home Business Set-Up Guide

Part 2 of 5 On The Home Business Set-Up Guide

Dear Reader,

These articles will provide a step by step guide on how to start and run a home based business based on my experiences and other home business owners. This is part 2 in a series of 5 articles. They are written in a basic format and where possible main points are summarised in an attempt to be understood by all. I have tried to minimise the technical jargon as much as possible.

So lets jump right in and see what we need to know about starting and running a home based business.

Regards,
Alvin
http://www.parttimeincome.org

I publish Home Business Tips, a fresh and informative newsletter dedicated to supporting people like YOU! If you’re looking for the best rated home business opportunities, latest time saving tools and helpful support from a friend in the business, come by and a grab a F-R-E-E subscription today at: http://www.parttimeincome.org

Legal Structures

The legal structure of your business is very important as it is a function of liabilities and tax deduction. The most common structures are:

§ Sole trader
§ Partnership
§ Company
§ Trust

Sole Trader

When you are a sole trader you are personally responsible and liable for the business and its activities. Commonly you may start out as a sole trader, and as you expand, you will need to seek out partners or investors. Your accountant is the best person to advise you if this is the best structure for your business.

Partnership

This arrangement is where you and your partner are liable for anything related to your business. It is a very good idea to get a solicitor to write up a partnership agreement to avoid disputes down the track.

Company

This is a legal entity liable for the debts it incurs and paying tax on income. Your accountant can help you set a company up, or you can buy one off the shelf, which may be more cost effective.

Trust

Depending on your personal circumstances, and the country you live in, trusts can be useful in business and estate planning. They can be quite complex, and again, your accountant is the best person to speak too.

Registering Your Business Name

You can operate a business under your own name or register a business name. Registration of a business name allows you to operate under that name.

Select a name for your business that describes to your customer what you do. A descriptive name promotes and advertises your business more effectively.

Licences And Permits

Depending on your municipality, you may need licences and permits. Do the right thing and check with your local council. Doing the right things now will save you a lot of unnecessary leg work later.

Insurance

Often overlooked, insurance is an important part of your risk management plan. There are two types of insurance: general insurance for loss/damage of assets and risk insurance which is your personal insurance cover.

Ensure your business insurance is separate to your personal insurance.
To establish the type and amount of insurance you need for your home based business, check with an insurance broker.

Managing Risk

You must have a risk management strategy for your business. Your SWOT (Strengths, Weakness, Opportunities, Threats) analysis from article one, will show what could expose your business to loss and what actions to take to reduce that loss.

Marketing

As a home business entrepreneur, you must understand what your customers want and give it to them. You must strive to have a service or product that meets and excels your customers needs and expectations. This is what makes them come back to buy from you, and this is how you grow your profit. Try and think like your customers and you will find they want:

§ Satisfaction
§ Value for money
§ Performance
§ Reliability
§ Presentation

Don’t confuse marketing with selling. In a home based business, marketing is much much more and involves all aspects of the business- pricing, advertising, customer service to sales.

Marketing Mix

Communication with your customers is essential and develops the framework for your marketing strategy. You must tell your customers these important bits of information

§ Product- describe it in full detail, its special features and of course how it will benefit the customer

§ Price – explain your pricing strategy, don’t forget to consider your costs, discounts you will offer, payment policies

§ Promotion – choose the most effective for your type of business. If you don’t know, think about what you would prefer if you were the customer. Eg: telemarketing, flyers, e-mail campaigns

§ Place – what place will your product be so customers can find it and contact you. How will you deliver the product to your customers? You may need to consider getting a website.

Your Business Image

Even though you are running a home based business, make sure your office is comfortable and professional in appearance. Your website also needs to project the same kind of professionalism

Location

Your home based business needs its own dedicated area. Very often the living and working areas muddle into one, not allowing you to distinguish which is for work and for play. Keeping these separate is essential for running a home business. You must ensure that all family members understand this too.
A telephone is essential in your home office as it will be the first point of contact with your clients. Installing a second phone line separate from the personal line is essential along with a cell phone, answering machine and a pager. Talk to your telecommunications company, very often they have some great packages suited to small businesses.

Furniture And Equipment

Choose furniture that is comfortable and professional. This helps distinguish this area from the rest of the household.

Your office needs equipment and here are a few to get you kick started:

§ Computer
§ Chair(S)
§ Desk
§ Fax machine
§ Filing cabinet
§ Mobile phone
§ Telephone
§ Heating/cooling
§ Lighting

I hope this article has set you on the path to create your own home based business and empower you to reach your financial destiny.
In the next article, I will cover some of the ins and outs of operating a small business from home.